Spain’s Socialists Seek Cross-Party Alliance in Parliament

April 8, 2016Spainby EW News Desk Team

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Spain’s Socialist Party is seeking a three-way alliance with Ciudadanos, a pro-business party, and Podemos, an anti-austerity party, but Ciudadanos remains hesitant due to political differences, according to Bloomberg. Spain’s parliament must form a ruling coalition by May 2; otherwise, Spain will commence another election. Spain’s Conservative party lost many allies during the December 2015 elections, and the Socialists intend to reach across the aisle to gain ruling status.

Spain’s economy has long suffered, but the incessant infighting and failure to reach a consensus prevents the government from addressing the southern European nation’s core problems. Spain has one of the highest unemployment rates in the EU, including long-term job market issues that prevent the economy from gaining momentum.

Many Spaniards cannot get full-time work, and the reforms issued thus far have backfired in certain respects, creating a permanent underclass that struggles in an economy littered with dead-end jobs.

Prime Minister Mariano Rajoy and his cabinet fostered solid job creation and higher wages, but some of his policies have not gone over well with the public, most notably austerity, which explains the rise of Podemos in parliament.

Political Fighting

Spanish voters had their say by stripping conservatives of their majority status, but the government is left with a fractured parliament embroiled in bitter partisanship. The main holdout is Ciudadanos, whose undersecretary Jose Manuel Villegas stated there is little his party can agree on with more left-leaning factions.

Although Socialist talks with Podemos are ongoing, tensions remain as Podemos head Pablo Iglesias angered Socialists by mentioning the Socialist-involved killings of Basque separatists during the 1980s. Meanwhile, the Socialists accuse Ciudadanos of being a mirror image of the Conservative Party.  

Spain's Economy Status

Spain saw 0.7% GDP growth in the first quarter, bolstered by such factors as a weaker euro that enhanced the exports, and the European Central Bank’s easing program, notes Reuters. While the current bickering has not affected Spain’s recovery efforts, central bank leaders believe constant clashes could render consumers and the business community uneasy about the future.

Spain’s government predicts that the economy will expand 2.7% in 2016, but such a feat could cause companies to postpone long-term projects in an uncertain political climate. The political fate of Conservatives is an open question, and it remains to be seen how a potential coalition would address the economy going forward.

Additionally, the possibility of another election in June raises more uncertainty that could threaten economic and political stability if the business community grows more nervous. Representatives from the three opposing parties will meet again on Friday to discuss the status of a possible alliance.

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